Question

Hari borrowed Rs.12600 from a moneylender at 15% per annum simple interest. After 3 years, he paid Rs. 7070 and gave a goat to clear off the debt. What is the cost of the goat?

Answer 1

 Hint: In mathematics, simple interest is used to calculate the interest on a certain amount. Simple interest is paid at the end of a specific time period and is always a fixed amount that the borrower has to pay. It is calculated by using the formula:

$S.I. = \dfrac{{P \times T \times R}}{{100}}$

After calculating the value of S.I., the principal is added to it to get the total amount that the borrower has to give. Its formula is given by:

${\text{Amount = P + S}}{\text{.I}}{\text{.}}$

In this question, we have to calculate the value of interest then calculate the amount. Here the amount is equal to the sum of the amount paid after 3 years and the cost of the goat.

Complete step-by-step answer:

According to the question,

Principal (P) = Rs.12600

Rate (R) = 15%

Time (T) = 3 years

After 3 years, he will pay back money with interest hence, we have to calculate the simple interest first

Simple Interest (I) = $\dfrac{{P \times T \times R}}{{100}}$

$I = \dfrac{{12600 \times 15 \times 3}}{{100}}$

$I = 126 \times 15 \times 3$

$I = 5670$

Therefore, the interest paid on the principal amount is Rs.5670

Amount to be paid after 3 years = \[P + I\;\;\]

${\text{Amount = 12600 + 5670}} $

${\text{Amount = Rs}}{\text{.18270}} $

Hari pays Rs.7070 and a goat to clear off the debt after 3 years.

So, Amount = 7070 + Cost of goat

Let the cost of goat be x,

$18270 = 7070 + x $

$x = 18270 - 7070$

$x = 11,200 $

Therefore, the cost of the goat is Rs.11,200.

Note: When you borrow money, there is an extra amount to be paid along with the amount you borrowed. That extra money that you pay is known as interest. Simple interest is paid only on the principal amount.